Demotion Letter with Salary Deduction

The owners of a firm, company, or industry have many tough decisions to make throughout the whole year. These decisions can be of various kinds. These decisions cover hiring the employees, amendments to policies, terminations, warnings, and demotions. The demotion can be voluntary or involuntary. Both need appropriate reasons. Additionally, the dates, times, and titles are also important in demotion letters.

Sometimes there come financial crises in an organization or company. The financial breakdown is a serious setback. If the company suffers a setback, the employees also need to be cooperative with the employer rather than playing a blame game.

Sometimes, cooperation and teamwork can make big issues resolved with ease. In this case, the employer needs a quick and clear decision to bring everything into the working position and to re-settle the whole company with the best possible efforts.

When a company suffers a big loss, it needs to make big amendments to some rules and procedures. Sometimes, the employer needs to deduct the salary. In this case, s/he has to write a demotion letter concerning employees. Such a letter must be positive and friendly.

It should be clear the reasons for this action. And, restoring policies must also be shared in such letters to keep the motivation level of employees in such hard times.

The demotion letter of such kind includes the revised salary patterns, the useful dates, the reasons, etc. it is much better to include the revision and restoration policies in such a letter.

The other type of demotion in salary is due to the work performance of an employee. The lack of expertise or negligence in official responsibility is the main cause to issue such a letter against an employee.


After carefully analyzing your performance for the last six months, we are very sorry to inform you that we must demote you to the position of assistant manager. The decision will come into effect from (Mention Date). Let me clearly mention that the reason behind this decision is your utmost negligence at the workplace. You need to be very careful from now on. You are advised to review the disciplinary laws of the company and do your best to abide by them in the future. With Thanks!


We regret to inform you that your employment will be terminated due to your consistent bad work record. Your demotion to the position of assistant manager has been decided. This decision has been taken by mutual consent and agreement of myself and the directors. The main factor behind this decision is your constant tardiness. Please take this letter as legal documentation of your termination along with your salary deduction.

See also: disciplinary decision of demotion of an employee

Sample -3

Please be advised that this is a formal notification of your demotion and deduction in salary.

This decision will come into effect from [DATE] and you will be demoted to the position of assistant manager. This decision has been taken by the mutual understanding and consensus of myself and all the directors.

We would like to highlight the factors due to which we have taken this decision. Your negligence at work and poor office manners have forced us to take this step. Please review the disciplinary laws of the company and do your best to abide by them.

With thanks.

Demotion letter with salary deduction

File: Word (.docx) & iPad
Size 22 KB

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